In Estonia, once under the thumb of Soviet rule, austerity programs have allowed them to bounce back from the 2008 crash and recession and are now producing steady economic growth. Although it was one of the countries that was hardest hit, Estonia's economy grew by 7.6% last year (five times the euro zone average) and slashed its budget to 6% of GDP (compared to 81% in Germany and 165% in Greece). They did this, as Peeter Koppel, investment strategist at the SEB bank, explains, very simply,"I can answer in one word: austerity. Austerity, austerity, austerity."

Ministers' salaries were cut by 20%, civil servants' salaries were cut by 10%, and they raised the retirement age, made it harder to claim benefits, and reduced job protection, according to Estonian Economy Minister Juhan Parts.

What is also noteable about the Estonian example is that immediately after the bubble burst in 2008, Estonia tried similar stimulus programs that Western Europe and the U.S. have tried. The result? It shrank the economy a staggering 18%. After this, Estonia decided to go against conventional wisdom and the advice hammered home by Paul Krugman and other Keynesian across the world and cut spending drastically, leading to clearing of bad debt and economic growth. This also led the president of Estonia, Toomas Hendrick, to stand up for himself against those who would advice against such "draconian cuts" by blasting Paul Krugman on Twitter. Hendrick, with a tint of sarcasm, attacked Krugman for ignoring and dismissing Estonia's successful example and for Krugman's supposed elitism.